The Earl of Onslow: In other words, we want to rearrange our financial affairs so that they appear differently on the register. That sounds to me dead dodgy if nothing else does.

Lord Williams of Mostyn: Dead dodginess must be in the eye of the beholder. It is a fact that some noble Lords might wish to alter their financial affairs. If they want to do so and therefore not be obliged to register, it occurred to me that a cut-off point in January might be too tight and that the suggestion of March seemed reasonable. As I always want to be reasonable, I accepted it.

Lord Kingsland: My final point is in relation to the reporting to the appropriate committee of any suspected breach of the rules. I feel quite strongly that the act of reporting, and the act of seizing the responsible committee with authority to investigate a matter, should be done entirely in private. It is quite understood that if the committee decides to embark on an investigation, the investigation will have to be, at least in part, in public; but the initial reporting of an alleged contravention of the rules should be in private.

Those are the only differences between my amendment and the Motion proposed by the noble and learned Lord the Leader of the House. They are differences of detail and not of principle. They seek, in my submission rightly, to create a more proportionate relationship between the public lives of noble Lords and their private lives, which in many circumstances ought justifiably to be kept private in exactly the same way as happens with other citizens of the United Kingdom.

Lord Monson: Before the noble Lord sits down, perhaps I may question the assertion made at the beginning of his most persuasive speech that paragraph 9 provides an objective test. I submit that the word "reasonable" can never be wholly objective. If one asks 1,000 different people, one will get 1,000 different interpretations of exactly what is reasonable and unreasonable in terms of exactly where the line should be drawn.

Lord Kingsland: Many judges sitting in civil cases without the assistance of juries have had to confront that difficult problem and deal with it as best they can. At the end of the day, a committee of your Lordships' House sitting in judgment on a noble Lord who is alleged to have breached the code will be faced with exactly the same problem. The committee's view of reasonableness will be the majority view of that committee and is ultimately based on subjective perceptions. I accept that.

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But all propositions that are based on the concept of reasonableness have to confront and overcome that problem. What cannot be controverted is that the noble Lord, Lord Neill, has introduced a new test and that the House, for better or for worse, has to adjust with the times. That is why, in principle, my noble friend Lord Elton and I agree with the general approach of the noble and learned Lord the Lord Privy Seal.

Moved, as an amendment to the Motion in the name of the Lord Privy Seal, line 1, leave out all the words after "CODE OF CONDUCT FOR MEMBERS OF THE HOUSE OF LORDS" and insert:
"Purpose of the Code of Conduct
1. The purpose of this Code of Conduct is:

(i) to provide guidance for Members of the House of Lords on the standards of conduct expected of them in the discharge of their parliamentary and public duties;

(ii) to provide the openness and accountability necessary to reinforce public confidence in the way in which Members of the House of Lords perform their parliamentary and public duties.
2. This Code applies to all Members of the House of Lords who have not taken leave of absence.
Public duty
3. By virtue of their oath, or affirmation, of allegiance, Members of the House of Lords have a duty to be faithful and bear true allegiance to Her Majesty the Queen, her heirs and successors, according to law.
Personal conduct
4. Members of the House:

(i) should act always on their personal honour;

(ii) must comply with the Code of Conduct;

(iii) must never accept any financial inducement as an incentive or reward for exercising parliamentary influence;

(iv) must not vote on any Bill or Motion, or ask any question in the House or a Committee, or promote any matter, in return for payment or any other material benefit (the "no paid advocacy" rule).
5. Members of the House should observe the seven general principles of conduct identified by the Committee on Standards in Public Life. The seven principles are:
Selflessness: Holders of public office should take decisions solely in terms of the public interest. They should not do so in order to gain financial or other material benefits for themselves, their family, or their friends.
Integrity: Holders of public office should not place themselves under any financial or other obligation to outside individuals or organisations that might influence them in the performance of their official duties.

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Objectivity: In carrying out public business, including making public appointments, awarding contracts, or recommending individuals for rewards and benefits, holders of public office should make choices on merit.
Accountability: Holders of public office are accountable for their decisions and actions to the public and must submit themselves to whatever scrutiny is appropriate to their office.
Openness: Holders of public office should be as open as possible about all the decisions and actions that they take. They should give reasons for their decisions and restrict information only when the wider public interest clearly demands.
Honesty: Holders of public office have a duty to declare any private interests relating to their public duties and to take steps to resolve any conflicts arising in a way that protects the public interest.
Leadership: Holders of public office should promote and support these principles by leadership and example.
Primacy of the public interest
6. In the conduct of their parliamentary duties, Members of the House shall resolve any conflict between their personal interest and the public interest in favour of the public interest.
Registration and Declaration of Relevant Interests
7. Members of the House must:

(i) declare any relevant interest of their own or of their spouse, which is pertinent to a debate, when speaking in the House and otherwise pertinent when communicating with Ministers, government departments and executive agencies. This is necessary in order that their audience may form a balanced judgment of their arguments.

(ii) register in the Register of Lords' Interests all relevant interests of their own or of their spouse, in order to make clear those interests that might reasonably be thought to influence their actions.
What is a relevant interest?
8. The test of relevant interest is whether the interest might reasonably be thought by the public to affect the way in which a Member of the House of Lords discharges his or her parliamentary duties.
9. The test of relevant interest is therefore not whether a Member's actions in Parliament will be influenced by the interest, but whether others might reasonably think that this might be the case.
10. Relevant interests are capable of including both financial and non-financial interests.
Relevant financial interests
11. Relevant financial interests connected with the provision of Parliamentary services include:

(i) Parliamentary consultancies;

(ii) Receiving payment for advice in relation to parliamentary matters;

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(iii) Employment or other financial interests in businesses involved in parliamentary lobbying on behalf of clients, including public relations, accountancy and law firms.
12. Members are obliged to refrain from speaking or voting on any matter connected with the provision of parliamentary services. However, Members of the House involved with organisations that offer commercial lobbying services are not obliged to refrain from participating in parliamentary business in connection with all clients of that organisation, but only their personal clients.
13. All Members of the House must:

(i) Register in the Register of Lords' Interests any consultancy agreement under which they provide parliamentary advice or services;

(ii) Deposit a copy of any such consultancy agreement, excluding levels of remuneration, with the Registrar of Lords' Interests so that it is available for public inspection;

(iii) Provision by an outside body of secretarial and research assistance;

(iv) Any remunerated service which Members of the House may provide by virtue of their position as Members.
15. In addition, relevant financial interests may also include:

(i) Significant shareholdings;

(ii) Significant landholdings (other than Members' homes);

(iii) Any other financial interest or inducement, which might reasonably be thought to influence a Member of the House.
16. Members of the House are not required to disclose how much they earn from the financial interests set out in paragraphs 11 to 15.
Relevant non-financial interests
17. The following non-financial interests are always relevant and therefore must be registered:

(i) membership of public bodies, such as hospital trusts, the governing bodies of universities, colleges and schools, and local authorities;

(ii) trusteeships of museums, galleries or similar bodies;

(iii) acting as an office-holder or trustee in a voluntary or not-for-profit organisation, pressure group or trade union.

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18. Relevant non-financial interests may also include (depending on their significance):

(i) other trusteeships (excepting family trusts);

(ii) unpaid membership of voluntary organisations.
19. Members of the House are under no obligation to register unpaid membership of organisations or membership of Churches, religious bodies and quasi-religious organisations. But it may be necessary to declare such interests. (See paragraph 20).
Interests relevant in specific contexts only
20. Some financial and non-financial interests may not be relevant generally, because they could not reasonably be regarded by the public as affecting the way in which a Member of the House discharges his or her parliamentary duties. But such interests may be thought to have such an effect in the context of a particular debate, division or correspondence. Such interests should therefore be declared as pertinent to that debate, division or correspondence. In cases where a Member of the House votes in a division where he has a pertinent interest that he has not been able to declare, he should register that interest within 24 hours of the division.
Advice
21. The meaning of "relevant interest" may depend on circumstances. The Registrar is available to advise Members. A peer who acts on advice of the Registrar in determining what is a relevant interest satisfies fully the requirements of the Code of Conduct.
Enforcement of the Code of Conduct
22. Allegations of non-compliance with this Code are to be dealt with as follows:

(i) Any allegation should, as a normal courtesy, be raised first with the Member complained against. However, there may also be circumstances when it is more appropriate to raise the matter with a party Leader or Chief Whip, or the Convenor of the Cross-Bench Peers.

(ii) If, after the above steps have been taken, the complainant chooses to pursue the matter, he or she should refer the allegation directly, and in private, to the Sub-Committee on Lords' Interests through its chairman.

(iii) The Sub-Committee will then examine the allegation and may decide to investigate it further or to dismiss it.

(iv) In investigation and adjudication of complaints against them, Members of the House have the right to safeguards as rigorous as those applied in the courts and professional disciplinary bodies.

(v) If, after investigation, the Sub-Committee finds the allegation proved, the Member complained against has a right of appeal to the Committee for Privileges.

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(vi) The conclusions of the Sub-Committee and of the Committee for Privileges will be reported to the House. "

23. The adoption of this Code shall have effect from a date to be determined by a Resolution of the House, which shall not be before 31st March 2002.--(Lord Kingsland.)

4.30 p.m.

Baroness Hamwee: I welcome the opportunity to confirm to a sadly sometimes sceptical world the propriety of this House. What is proposed in the code will meet public concerns without overreacting. I entirely take the point about the difficult circumstances that we have sometimes seen at the other end of the building. That was very much in the minds of the members of the group in its work. The code will not constrain how Members of the House go about their business but will affirm the House's wish to be regarded as open and accountable and to ensure that others do so regard us. At a time when too often we hear from citizens and voters and not just from the media that, "You politicians are all the same; you're only in it for what you can get out of it", I believe that the code as proposed by the Leader of the House is "fit for purpose".

Like the noble Lord, Lord Kingsland, I thank the noble and learned Lord for his chairing of the group. He steered it with a light touch, which is reflected in the code, and with huge sensitivity. He was very patient with those of us who occasionally wished to revisit issues which he thought we had closed. Like other members of the group, I spoke in the group for myself--we shall of course have a free vote later today--but I hope that I reflected the concerns of my colleagues. I believe that the code as proposed is welcomed and supported by the majority of those on the Liberal Democrat Benches.

I shall not go through each section of the code because, as has been said, most of it has not attracted amendment, save to say to those who feel we should not have a code at all that, sadly, public life and politics in the 21st century require that we do. If rejected, the message would be that Members of this House think themselves above scrutiny and that they are not prepared to account for themselves.

Perhaps I may deal with the points of contention. I understand why, when introducing his amendment, the noble Lord, Lord Kingsland, reversed the references to the code and personal honour. There is much to be said for that. But I do not think that it was an issue in the group. A number of the noble Lord's proposals are primarily matters of drafting. I recognise, because I do it myself, the temptation for a lawyer to redraft and redraft almost to infinity in the continuing search for the most elegant phrasing. That should not be the basis of a vote today.

Many of the substantive points are answered by the provision, to which attention has been drawn so often, for advice from the registrar. In our debates in the group we kept coming back to that. We may have wanted to create a code without room for question but

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by their very nature these are issues of degree and judgment. Accepting that that is the context, what we have produced is a cogent and comprehensible code. It is not always easy to assess for oneself the term "might reasonably be thought by the public to affect the way in which a member discharges his parliamentary duties". It is not easy because Members do act on their honour and do not necessarily realise that the most innocent act may not appear to be wholly so.

The disclosure of remuneration for parliamentary consultancies should be a requirement. We are entitled to privacy in our private lives, but we must accept that where the private meets the public we are not private citizens. That is part of the price that we have to pay for accepting the position of public office that we hold by virtue of our membership of the House. The option to disclose other remuneration and the use of the register can nip in the bud any suggestion of improper influence. Furthermore, in a world which increasingly is moving towards complete transparency, where a great deal of information can be gleaned from other sources--the companies registry has been referred to and I would add to that HM Land Registry--it would be odd not to include this option.

I turn now to family trusts. I am one of those who took the view that the position of a trustee could be significant. It comes close to a personal financial interest. Many situations could arise where holding the trusteeship for a family trust would affect the judgment of a trustee. For instance, a trustee may have to consider his own grandchildren, who quite often can be the beneficiaries of such a trust.

Shareholdings which do not amount to a controlling interest may be significant. If a large shareholding forms only a small proportion of a company's shares, the shareholder could not affect the decisions reached by that company. However, if the test is how the shareholder regards himself and could reasonably be regarded as regarding himself, then dealing with regulations or legislation which come before the House or speaking on any public occasion could substantially affect the value of a shareholding, however small the proportion of that holding.

Perhaps I may turn now to hospitality. Again, I am not sure that any time has been spent on this matter so far, but I know that it is an issue which concerns noble Lords. I may not be alone in wishing that we were offered rather less hospitality than is the case. I do not believe that attending receptions in order to meet representatives of an organisation amounts to anything more than a matter of duty. Certainly one does not attend them in order to drink those glasses of lukewarm white wine and eat the greasy canapes--of course I do not refer to our own Refreshment Department here.

Nevertheless, some noble Lords are concerned that this requirement could mean that every cup of tea or lunch should be registered. However, I do not believe that every lunch attended to listen to matters of public concern in a particular sector constitutes hospitality that needs to be registered. The purpose of such hospitality is the passing of information; the

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hospitality is not being used to influence the Member. If it could be regarded to be that--perhaps because it is not only lunch, but a week's holiday in the Bahamas (not that I have ever been offered anything of that kind)--then of course it should be registered. But often one meets for lunch to listen to information simply because lunch offers the only time available to do so.

I turn to the matter of whose interests should be taken into account. I have to say that, for myself, I think that I would be influenced if, for example, the financial interests of my closest and oldest woman friend--I do not refer here to a synonym for a constant companion--were to be significantly affected, because, if I knew about them, they would be relevant. The test is whether the interest would be significant to me personally. I do not believe that, under this provision, I would be required to question everyone on my Christmas card list. But if I felt that I would be affected, I would take advice as to whether I needed to register for myself and whether I needed to register the identity of the friend. That would depend on many different circumstances. I do not believe that the detail of such a proposal can be legislated in advance.

Ironically, it has already been pointed out that the term was used in the guidance resulting from the Griffiths report, under which noble Lords have been operating since 1995. I take the view that to omit this provision would be a backward step and perhaps would convey a message that we have something to hide which we should have been disclosing over the past six years.

I turn finally to the question of procedure. The noble Lord, Lord Kingsland, proposed that a matter must be raised first with the Member concerned, the leader or Whip of his party or the Convenor. I believe that the requirement to do so "normally", the term used in the proposed code, is correct. Very rarely there may be circumstances in which a Member would not raise a matter at all unless he could approach directly the chair of the committee, but I do not think that that would amount to putting the matter into the public arena. But in my view it would not be right to set up a procedure unless that procedure could also facilitate the pressing of a complaint and its pursuit in the measured way proposed.

As regards the date, I do not believe that my noble friend the Chief Whip felt it necessary to go to March 2002. I should say that it is not a matter on which we feel strongly.

Taking part in the work of the group made me review for myself how easily I might dismiss as insignificant what could be viewed quite differently by others. Even though I have a local government background--the noble Lord the Leader of the House referred to that--which applies stringent rules requiring Members to leave the Chamber when certain matters are under discussion, taking part in the work of the group has made me think seriously about how we may appear to those outside.

I welcome the code and I believe that it is a fitting step to take at the start of the first full Parliament of the 21st century. It is important that today we reaffirm

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the awareness of this House and how conscious are noble Lords of the need to uphold the highest standards and to be entirely open--indeed, to be ambitious to tell the world that we do so.